As Vietnam plans to privatize more than 432 state-owned enterprises (SOEs) over the next two years, Prime Minister Nguyen Tan Dung has urged the businesses and management authorities to speed up the process.

Speaking at a conference on Tuesday, Dung ordered ministers and local governments to keep tabs on the performance of SOEs, saying that any firm that shows “hesitation” during the process needs to be heavily disciplined.

He called for “drastic” action on the 432 businesses that have been earmarked for privatization over the next two years.

It is also necessary to review and add more businesses to the to-be-privatized list so that there is a “strong” reduction in number of companies in which the government has a 100 percent or controlling stake, he said.

He described as “slow” the pace at which the process has been implemented thus far, noting that in the past three years, just 99 businesses, nearly half of which were under the Ministry of Transport, have been privatized and 180 others restructured.

Furthermore, some firms have violated laws, badly affecting the general reputation of SOEs, the PM said.

Privatization is the focus of the country’s efforts to restructure its economy, but many SOEs were slow to do it, even after their privatization plans have been approved, like 16 businesses under the Ministry of Culture, Sports and Tourism, Dung said.

He also ordered SOEs to speed up their divestment, saying that investment in non-core businesses was estimated at VND17 trillion.

No state dominance

Under a draft decree on the categorization of SOEs, the government will own more than 50 percent of shares in firms providing public services like urban drainage, environmental hygiene maintenance and urban lighting, Tuoi Tre reported.

However, Le Manh Ha, vice chairman of the Ho Chi Minh City People’s Committee, told the meeting that he saw no reasons why these businesses must be owned by the state, because they have recently been caught violating regulations.

Other sectors will possibly work in these fields more effectively, he said.

According to the draft introduced by the Ministry of Planning and Investment, the state will own 100 percent of chartered capital at businesses in fields like national defense and electricity; at least 75 percent in fields like aviation, telecommunications, and mining; and at least 65 percent in fields like tobacco, rubber, and coffee.

The Ministry of Transport reported that 11 of its businesses engaged in building traffic infrastructure were completing the last steps before launching their initial public offerings (IPOs).

Transport Minister Dinh La Thang also announced that the ministry will privatize a subsidiary of Vietnam Airlines Corporation (VAC) to mobilize more funds for Long Thanh International Airport project that will be launched next year in the southern province of Dong Nai.

The airport, which will replace the Tan Son Nhat International Airport in HCMC, is estimated to need US$7 billion for the first phase.

VAC, which manages Vietnam’s 22 civilian airports, will start privatizing this year with the government owning more than 75 percent of its shares.